It is imperative that we measure all aspects of sales and more importantly, our sales people’s performance. In doing so they can truly understand their job, and stay consciously competent. Measuring Sales performance should not be used as a basis for punishing people. It should be used as a way to recognize and improve performance. It also gives sales management a basis for positively reinforcing good performance. This performance is the behaviour that is expected in order to achieve both individually and collectively as a team. When our sales people are not effectively and transparently measured, we in management fail.
Inspect What You Expect
The key matrices for measuring sales performance then to be:
- Revenue generation
- Goal/plan attainment
- Opportunity management
- Conversion rate
- Sales cycle time
- Contribution margin
The frequency that such data is reviewed by e.g. the sales manager or the company’s management may vary. Typically sales performance will be monitored weekly, monthly, quarterly and of course, annually. When you structure your sales data, you could end up with more than 10k data points available and then drill down into details. Overall, today’s CRM technology provides the tools to easily understand this data. The problem is that we tend to believe in our data and not in our people.
Garbage in – Garbage out
Recent research by CSO Insights found that only 25% of companies surveyed are highly confident in the data available from their CRM system. This is in stark contrast 85% of world class. The result is a lack of confidence in the data within the CRM.
Why is world class so far apart from the rest? The answers lies in a dynamic fully understood and always used sales methodology around all recorded opportunities which drive the weekly, monthly, and quarterly sales forecast. The funnel integrity and forecast accuracy are a reflection of the process maturity of world class sales organizations and of the sales management culture creating the forecast. Funnel integrity must be high before powerful analytics can be leveraged to create deeper views of the data.
Establishing Metrics Standards and using Benchmarks
Another step in the sales performance management cycle is to communicate and review the standards of quality that are expected in the organization.
Opportunity data with the CRM connect sales cycle length for e.g. lead generation and qualification, account strategy and messaging, as well as sales call strategies such as obtaining action commitments from customers and achieving opportunity milestone conversions. Data points for time spent in each sales phase and conversion rate by sales phase and opportunity type provide true facts to replace perceptions.
Seller’s time is a fixed sales resource. Therefore, the only reliable way to increase their productivity is to help them decrease the amount of time (versus duration) they require moving customers through their buying process and remove all non-value added administrative burden. We need to watch best practices correlating behaviours to success and establish a strong coaching culture for continuous improvement. CSO Insights found that formal coaching can improve the win rate of forecasted deals by up to 9%.
How CRM can help in measuring Sales Performance
A CRM system benefits an organisation as it embeds a culture of measuring sales performance within the organisation. This creates a culture within the sales team and organisation as a whole of achieving performance targets. A CRM system ensures that the measuring of sales performance is achievable and transparent. Based on these, management can then take educated business decisions.
ProAptivity are an independent CRM solutions provider. We focus on the implementation, training, and support of highly customised CRM software solutions. Our CRM software supported by our sales training provide customers with the tools needed to deliver successful sales process management.
Fundamentally, we help organisations embed CRM best practice throughout their organisation.
If you need help in understanding why my business needs CRM, maybe some of our eBooks could help! Alternatively visit Maximizer CRM or Pipedrive CRM for more information. Contact us today on 028 9099 6388 or via firstname.lastname@example.org. We can help you assess if your business is CRM ready.
Source: MHI Global